Solar lease vs. buy calculator
Cash, loan, lease or PPA: see how each one plays out over the years, including escalators and dealer fees, and what happens if you move early.
The system
Buying
Lease and PPA
25-year comparison
| Measure | Cash | Solar loan | Lease | PPA |
|---|---|---|---|---|
| Upfront | $21,000 | $0 | $0 | $0 |
| Net after 25 years | $33,160 | $2,100 | $8,320 | $13,962 |
| Net after 25 years | $33,160 | $2,100 | $8,320 | $13,962 |
| Value today (NPV) | $7,712 | −$3,727 | $4,689 | $7,341 |
| Payback | 11.6 yrs | No upfront cost | No upfront cost | No upfront cost |
First-year bill savings: $1,764. Loan principal including the dealer fee: $28,000 ($217/mo). Lease payment in year 25: $238/mo.
Show as a table
| Year | Cash | Solar loan | Lease | PPA |
|---|---|---|---|---|
| 0 | −$21,000 | $0 | $0 | $0 |
| 1 | −$19,411 | −$1,014 | $324 | $392 |
| 2 | −$17,783 | −$1,989 | $650 | $795 |
| 3 | −$16,114 | −$2,923 | $978 | $1,210 |
| 4 | −$14,403 | −$3,815 | $1,308 | $1,636 |
| 5 | −$12,650 | −$4,665 | $1,639 | $2,074 |
| 6 | −$10,854 | −$5,472 | $1,973 | $2,525 |
| 7 | −$9,013 | −$6,234 | $2,307 | $2,988 |
| 8 | −$7,126 | −$6,950 | $2,643 | $3,465 |
| 9 | −$5,193 | −$7,620 | $2,979 | $3,955 |
| 10 | −$3,211 | −$8,241 | $3,317 | $4,459 |
| 11 | −$1,181 | −$8,814 | $3,655 | $4,977 |
| 12 | $901 | −$9,335 | $3,994 | $5,509 |
| 13 | $3,033 | −$9,805 | $4,333 | $6,057 |
| 14 | $5,219 | −$10,223 | $4,672 | $6,620 |
| 15 | $7,459 | −$10,585 | $5,010 | $7,199 |
| 16 | $9,755 | −$10,893 | $5,349 | $7,794 |
| 17 | $12,108 | −$11,143 | $5,686 | $8,406 |
| 18 | $14,519 | −$11,335 | $6,022 | $9,035 |
| 19 | $16,990 | −$11,467 | $6,357 | $9,682 |
| 20 | $19,522 | −$11,537 | $6,691 | $10,347 |
| 21 | $22,118 | −$8,942 | $7,022 | $11,030 |
| 22 | $24,778 | −$6,282 | $7,351 | $11,733 |
| 23 | $27,503 | −$3,556 | $7,677 | $12,455 |
| 24 | $30,297 | −$763 | $8,000 | $13,198 |
| 25 | $33,160 | $2,100 | $8,320 | $13,962 |
Cash: $33,160 after 25 years. Solar loan: $2,100 after 25 years. Lease: $8,320 after 25 years. PPA: $13,962 after 25 years
Reading this honestly
- Leases and PPAs need no cash, but the provider keeps the tax credit and the system, and escalators compound: a 2.9% escalator makes the year-25 payment 99% higher than year 1.
- If your electricity prices rise slower than the escalator, a lease gets worse every year. Try setting rate increases to 2%.
- Selling the home with a lease means the buyer must qualify and agree to take it over, or you pay a buyout.
Why leases are everywhere in 2026
Homeowners lost the 30% federal credit for purchases after 2025, but lease and PPA providers can still claim a business credit until 2027. That makes leases easier to sell. The provider keeps the credit; whether you share in it depends on the contract price and escalator.
What makes a lease reasonable
A low or zero escalator, a price well below your current rate, clear buyout and transfer terms, and a provider likely to be around for 25 years. A 2.9% escalator roughly doubles the payment by year 25.
Questions
Is it better to lease or buy solar?
Buying with cash or a low-cost loan usually saves the most over the system's life. A lease or PPA can make sense if you have no cash, can't borrow cheaply, and the contract has little or no escalator and a price well below your utility rate.
Who gets the tax credit on a leased system?
The leasing company. It owns the system and claims the business tax credit. Your benefit, if any, comes through the lease price.